New Development Strategies Borrow from Innovation Hubs

Remember the Washington Consensus? After years of false starts and dead ends in solving development challenges, new formulas now incorporate bold entrepreneurial components. The result is that for the first time in many decades, ending extreme poverty is less of an elusive goal.

Take the United States Agency for International Development (USAID) for example. Its new model for 21st century development borrows from a startup’s guide to success – such as the notion of proof-of-concept funding and consumer data-driven iteration.

“Our goal is to identify those innovations that can bend the curve of progress by increasing impact, reducing costs, accelerating progress, and/or extending sustainability,” recently wrote Ann Mei Chang, who was recruited from Google to run the U.S. Global Development Lab at USAID.

At the turn of the millennium, there was a lot of talk about whether technology would end poverty. While technology helped improve millions of lives, it alone did not help the very poor. Now, promising technologies that widen access to health care, food and energy are being purposefully procured and scaled for development purposes.

Government agencies are not strangers to the concept of innovation. In fact, civic innovation is now helping to solve a variety of challenges, and the level at which governments source innovative solutions from the market is becoming a core performance measure of cities around the world.

The Inter-American Development Bank’s Demand Solutions: Ideas for Improving Lives is combing the world for powerful ideas that can be scaled. For example, Laboratoria is a tech school developed by a young Peruvian to teach coding and web development to at-risk women who lack access to higher education. Upon graduation, Laboratoria connects its students with companies in need of their skills. Another example is USound, an innovative technology that allows people to use their smartphones as a hearing aid, which is having a substantial impact in the development world by increasing inclusion.

For other new technologies to have as powerful an impact, they need an ecosystem where they can grow from niche solutions into development tools for agencies and local governments, and then to local entrepreneurs who can help sustain their implementation. Therein lies the beauty of the new development approach: an ecosystem-wide perspective that knows no borders and creates links among stakeholders, allowing solutions to scale.

The 2015 Sustainable Development Goals (SDGs), adopted this past September by 193 national leaders, includes a clear call to action: pipelines of innovation are needed for “supporting domestic technology development, research and innovation in developing countries.” One of its cornerstone goals is to “substantially increase the ratio of research and development workers per 1 million people.”

It is refreshing to see entrepreneurship and innovation firmly on the development agenda – in the United States and around the world. But more than refreshing, it is critical because while poverty rates are falling in populous nations like China and India due to sustained economic growth, poverty rates in fragile, conflict-ridden parts of the world will at best remain fixed and are likely to increase. Interventions from outside these countries are much harder to undertake, as Ann Mei Chang recently noted. In those areas, entrepreneurship has an enormous role to play by empowering local innovators to develop market-proven solutions tailor made to address local problems.

On the agenda at the March 14-17 Global Entrepreneurship Congress in Medellín, Colombia is how entrepreneurship has proven itself as a development tool, and has also contributed to reducing conflict and building peace.